USAA CIO Banking on Siri-like Mobile Software

Reporter

USAA bank next month will begin testing next-generation voice recognition software that will let its customers make payments, check balances and find the nearest ATM by speaking into their smartphones, said USAA CIO Greg Schwartz, who is involved in all of the bank’s strategic and operational activities.

The financial services firm, which serves 9.1 million military members and their families, is using the software to adapt to an increasingly mobile banking environment. The company needs a strong mobile strategy to serve its members, who often travel on military duty, said Schwartz. Over time, the software is expected to boost customer loyalty and help attract new members, achieving one of USAA CEO Josue Robles Jr.’s goals to grow the business. “Our members want their providers to be with them in their pocket or purse wherever they are,” said Wayne Peacock, USAA executive vice president of member experience, who is working with military customers testing the software.

USAA CIO Greg Schwartz

The software, called Nina and currently compatible with the iPhone, iPad and Android gadgets, works a lot like Apple’s Siri personal assistant application, which became popular on the iPhone 4S last year. USAA customers will tap a speech icon on the company’s application to launch Nina, and speak questions such as “How much did I spend last week?” and “What’s my checking account balance?” Users may also schedule payments with prompts such “Pay my USAA credit card on Friday,” said Peacock.

Nina, developed by Nuance Communications, rests in the cloud, linked to USAA’s mobile application for the smartphone. When a user makes a voice query through the app, the request is processed in Nuance’s cloud, and the response is sent to the mobile app on the user’s device. Customers then confirm the transaction through speech or touch. It’s a more efficient way of banking than the touch access currently offered by USAA’s iPhone, iPad and Android applications, which require customers to navigate several screens to complete credit card payments and other transactions, said Schwartz, who said Robles Jr. has allowed him to invest in labs to test the voice recognition software. “He is very excited about the prototype.”

Nina is intended for businesses that want to augment mobile customer service with more sophisticated voice capabilities. This is important at a time when consumers are seeking to use smartphones to conduct activities they would normally do online from a desktop or laptop computer.

With Nina, USAA is addressing the fact that its military members who often travel to serve their country rely on mobile handsets to keep connected to friends and family as well as their bank accounts. And because USAA’s only branch is its headquarters in San Antonio, Schwartz said a strong mobile strategy is essential to keeping customers as connected as possible to the bank, which had $19 billion in revenue in 2011. Currently, 87% of USAA’s customer transactions funnel through its self-service channels online or over a phone, but the bank expects its members will increasingly access USAA services through smartphones. For USAA, Nina rests in that sweet spot.

Peacock said he expects that if the technology is well received, it will reinforce loyalty among existing customers. Satisfied customers could then draw more military users to USAA. “All of those have great downstream benefits to our financials, but the primary focus for us is about delivering exceptional customer service to our members… anytime, anywhere,” Peacock said. Neither Schwartz nor Peacock would discuss what sort of revenue increase they expect from using the software in their mobile applications.

USAA’s adoption of Nina came after the bank began using Nuance’s voice recognition software 15 months ago to route calls to a self-service application or to any of the company’s 10,000 customer service representatives. After Nuance proved its mettle in USAA’s customer service system, Schwartz asked the company for help improving customer services from mobile devices. “It was just a natural progression to use Nina,” Schwartz said. “We told them we’d like to figure out how to use speech in our mobile channel.”

Rolling out the new voice recognition software broadly, which Schwartz expects to do in the first quarter of 2013, won’t be without some effort and challenges. USAA programmers will have to integrate the software with its mobile applications and then customize it. Also, a bigger question surrounds the reliability and accuracy of the software; Apple has been tuning Siri for the last couple years and the software still returns some irrelevant or awkward results. But Schwartz expects to learn a lot about the product to when he runs the iPhone pilot, and even more when he extends the software to users of the iPad and handsets based on Google’s Android software.

“I don’t think it’s gimmicky,” Schwartz said. “I think it’s going to be something that is going to be with us for a long time and as we learn how our members use this I think it’s going to be better and better.”

In this second article in a two-part series, Sonny Garg, senior vice president and chief information and innovation officer at Exelon Corp., the $27.4 billion competitive energy provider based in Chicago, describes the structure and inner workings of his emerging technologies team.